Integration of Lean Management Principles into Digital Transformation at Almimi United Company for Wood and Trading رسالة ماجستير

Abstract

Inventory is an important aspect of logistics. It plays a vital role in all fields of logistics; since the inventory levels are closely connected to tied-up capital it has to be well managed. In today’s manufacturing climate, there is an increasing focus on eliminating waste and applying Lean principles. Waste can be inventory, waiting, overproduction, transporting, over-processing, moving, and making defective parts and products. On the other hand, digital transformation is becoming one of the key areas of trade innovation in the face of tougher competition. Digital technologies make it possible to reduce costs, achieve sales growth, cover global markets, and quickly meet customer needs through direct contact and constant interaction with participants in the sales process. The main objective of this study is to improve the inventory management system at Almimi United Company for Wood and Trading (AUC-WT) by the integration of both Lean management principles (mainly the 5S methodology) and digitalization technologies (such as traceability technology systems). For this study, the research followed a mixed research approach. The qualitative part of this research included interviews with internal staff such as the CEO of the company, top management, and employees from different departments. In addition, meetings took place with external suppliers such as Bisan Systems Ltd Company (programming company). The researcher also depended on observations to learn about the influence of the physical environment. During the observation, the working process has been carefully documented. The researcher conducted several Gemba walks at AUC-WT, which are one of the lean practices. Also, the researcher relied on the PDSA Cycle (Plan-Do-Study-Act) in applying the barcode system at AUC-WT, to test its effectiveness. On the other hand, in applying the quantitative approach, the researcher used Pareto Analysis. The main results of the study showed that before the VI implementation of the 5S lean tool, it is evident that AUC-WT lacked the practices of lean management; a matter which is significantly affecting the workflow and the satisfaction of all stakeholders including the customers. However, after the 5S lean tool was implemented, the area was organized to improve work ergonomics and overall process flow, shelves were created to distribute the items in the form of families, and items were classified at a specific site. Also, cleaning the workspace and a new warehouse manager position has been created in the organizational structure for sustaining the work done. Implementation of automatic identification (Auto-ID) technology. All items have been registered into the Bisan system1, and each item adopted a specific serial number code. Furthermore, all items were printed on labels including the name of the item and its serial number code, and each label was placed in the right place. This process was done in conjunction with the application of the 5S lean methodology. In the light of the study findings, the researcher suggests the following recommendations; AUC-WT periodically follows up on classifying irrelevant or unnecessary items, constantly follows up a maintenance schedule periodically, reviewing the organizational structure, regularly auditing the checklist compliance, following up on the maintenance and updating of the barcode device, coding any new item, a follow-up to complete re-design the company. After two years from now, the company should conduct a study to show the impact of the various measures recommended by this study, should fully automate its work to benefit from the technological development in the world and continuous training employees on Lean Management principles.